1. Field of the Invention
The present invention relates to computerized system and method that automatically integrates the operation of multiple ROI tools to evaluate the cost and benefits of a technology purchase.
2. Background of the Invention
Several known tools are used to evaluate the desirability of technology expenditures. For example, various known return of investments (ROI) tools measure the cost benefits of the technology expenditure. For example, a technology expenditure may result in increase worker productivity in exchange for various purchase and maintenance costs, and the ROI tool attempts to quantify these costs and benefits.
For a given use of money in an enterprise, the ROI represents how much profit or cost saving is realized. An ROI calculation is sometimes used along with other approaches to develop a business case for a given proposal, and this business case operates as a template for achieving the predicted net benefits. The overall ROI for an enterprise is sometimes used as a way to grade how well a company is managed. If an enterprise has immediate objectives of getting market revenue share, building infrastructure, positioning itself for sale, or other objectives, ROI might be measured in terms of meeting one or more of these objectives rather than in immediate profit or cost saving.
Several methods have been used to measure the benefits of technology expenditures. Typically, an auditing approach has been used to document the potential savings. This approach usually involves a “picture in time” type of measurement study where functions are looked at in detail with the potential savings estimated. The studies tend to be organizationally focused meticulously detailing the potential savings throughout an organization. Once the snapshot has been taken, the study tends to become a reference document. While taking an audit or a snapshot in time can help to scope the size of savings possible with a technology acquisition, the organization is left with little understanding on how this change is to come about.
One issue implicit in the ROI approach is that the measurement metrics are based on specific industry standards. It is relatively easy in private industry to develop a set of metrics that can be used to measure the potential payoff from a technology acquisition. For example, a business can focus on inventory costs, look at how many millions of dollars that they can reduce their inventory investment by, value these savings at their cost of capital, create a measure and a target for the savings that they can attribute to the technology acquisition. In doing so, their target can be based on a range of metrics already available within their industry from similar firms doing similar things. Thus they can easily look to existing metrics and targets on which to base their change strategy and programs.
Various known ROI tools exists to assess technology expenditures. As suggested above, these ROI tools are often particularly adapted for use in by a particular organization or industry because the cost-benefit analysis depends on various assumptions. Furthermore, different ROI tools are developed for different types of products, and the ROI for each type of product is particularly adapted to address the costs and benefits of the particular product. Accordingly, it can be seen that a customized ROI tool is ideally created for each organization and each proposed purchase. However, the creation of an ROI tool is a relatively cost and labor intensive process that requires detailed studies of the purchaser and the product. Accordingly, there exists a current need for an ROI tool that is more robust and is able to handle a variety of different organizations and purchases. Specifically, there exists a need for technology that enable the use of existing ROI tools in a variety of different situations, thereby limiting the costs of perform the ROI analysis.
As stated above, the known ROI tools are particularly configured for particular products because theses tools address the particular costs and benefits of these products. When a technology purchase comprises a group of products (e.g., combinations of hardware and software), the ROI case study becomes much more difficult. Merely summing together the results of the ROI tools for the individual products often does not work since costs and benefits may be conflicting (e.g., a cost of one product may limit gains from another product). Accordingly, there exists a need for an ROI tool that easily calculates the costs and benefits for multiple products, and a tool that evaluates technology expenditures in view of an organization's various business needs.